Whether you start your day with a cup of coffee or a glass of orange juice, your morning breakfast budget is likely getting cheaper. Coffee and orange juice futures have tumbled to multiyear lows as supply outweighs demand for both commodities.
Wholesale coffee prices are under 87 cents per pound, the lowest level since 2005, and half of what the market fetched in 2016. Global supplies have been rising after producers expanded production over the last decade on hopes of rising demand; the expansion of coffee groves is now grinding prices lower.
Meanwhile, frozen concentrated orange juice futures fell to 90 cents per pound, the lowest level in nearly a decade. OJ is suffering from shifting consumer demand toward other fruit juices and away from sugary beverages in general.
Both coffee and OJ are also affected by a weak Brazilian currency, the real. A falling real encourages Brazilian coffee and orange producers to sell their goods on the international market, pushing prices lower worldwide as they seek to get their hands on more valuable currencies, like the U.S. dollar. This same phenomenon has sunk sugar prices lower as well, as Brazil is the world’s largest producer of all three commodities.